Worldwide manufacturing capacity expanded markedly in the 1980- 1984 period, prompted in important ways by the strength of the U.S. dollar. Newly industrialized countries have emerged who, because such a substantial portion of their capital is relatively new, are able to compete very effectively with U.S. producers. They do so, in part, because this new investment embodies cost structures associated with the latest technology, while U.S. industrial pricing reflects the use of plant and equipment of less recent vintage in many industries. The U.S. government is faced with major policy issues as a result of this competition. Similarly, the U.S. firms which face this competition directly must make decisions about investing in new technologies, and if so, whether the investment should be here or abroad. This project is a Phase II award funded under the Small Business Innovation Research Program. The purpose of this research is to develop and test a new analytical technique for determining the range of technologies in use each of the four-digit U.S. manufacturing industries. The research will utilize data from both the 1982 and 1987 Census of Manufacturing. In addition, a longitudinal data series on new investment by a single establishment will be prepared. This will be accomplished by working directly with the micro data at the Census Bureau, which also provides an opportunity to do advanced basic research and develop marketable tools in a manner never before possible. The research will culminate in the creation of a data base that will clearly identify the range of technologies in use in each industry and identify unit costs and other aspects of production associated with each technology. These data will be utilized on an ongoing basis for evaluating the effects of investments in new technologies on competitiveness, employment, costs and profits at the industry level and by geographic regions. The database will also be useful in predicting the pace at which investment will be undertaken in each industry.
